The FTSE MIB fell 0.7% to close at 44,456 on Thursday, mirroring sharp losses across European equity markets as further increases in energy prices tightened financial conditions, particularly in highly indebted economies. The heavyweight financial sector led the decline, with rising bond yields weighing on banks’ balance sheets and dimming the outlook for net interest margins. UniCredit slid 3.7%, while MPS and Mediobanca both lost close to 4%, reversing yesterday’s outperformance.
The weakness in banks came despite progress on consolidation plans: several merger proposals were approved, and MPS announced a EUR 1.6 billion share issue, offering Mediobanca shareholders 2.45 MPS shares for each Mediobanca share held. By contrast, heightened geopolitical tensions continued to buoy defense stocks, lifting Leonardo by nearly 6% to a new record high of EUR 63.88.
